Tax season is approaching and I’m sure we all have question! Mom On Dealz has answers to some of them. You can check out more Ask An Accountant posts here.
Question:
Do I have to claim money I make in a yard sale?
Answer:
Basically, the occasional garage sale does qualify for the exclusion from income due to the fact you normally sell your personal effects at a loss, and you can’t take a loss on this sale. In the event you sold something at a profit (highly unlikely, but could happen) you would have to report the gain :)
Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.
IRS Circular 230 Notice: Any U.S. tax advice in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions
I want to have an in home party for my friends where each guest brings one to four gently used items that they would sell at a garage sale. I would place an auction form with each item and ask the guest to bid on items that they want and then I would announce the highest bidder. I have done allot of research on this and the companies that are doing this state that the seller receives 50 percent of the sale and I would receive 50 percent. It can be viewed as a garage sale but in a different and more exciting way. Everything I see says no taxes need to be charged or taxes need to be filed on my part. I need to know the following:
If I use some of my money to chairty can I still do this without making myself a company?
If I keep the 50 percent, can I do this just like part of a consignment arrangement or garage sale without charging taxes or filing taxes or sbeing an actual business?
Can I do these once a month, same senerio, 50/50 without stating any business, just friends swaping or buying other friends garage sale items?